Tenant Moving In Now Has A Roommate

[Justin Johnson]

So, I have a tenant that is moving in on 2020-10-01 and we have already gone through the whole pre-screening, interview, application process, background/credit check, signing the lease agreement, everything was great.  The lease is signed between him and myself.  In our initial walk though/interview, I asked if there was going to be anyone with him and he said "no, just me" and 3 days before he is scheduled to move in he tells me about his roommate that he's been talking to, "telling her what's up", and her 2 kids.  He mentioned she would pay him rent and he would pay me.  I told him that I do not allow sub-letting and I would have to approve her anyway and her name would have to be on the lease.  I have no idea what to do in this situation.  I'm frustrated and I need a little advise from some more seasoned investors on how to handle this.

I've had them reapply for the property so that I could create a new lease with her name and her kids names listed.  Any advise would be appreciated.  Learning experience and I'm trying to learn all I can :-)

[David Clay]

Just curious, did you do a thorough background check on the original tenant? By this I mean credit check, current employer and length of employment if possible (last 4 pay stubs usually works adequately for me), previous landlords (don't use reference phone numbers check them yourself by looking up the address and getting the person's contact information from publicly available sources - if they're renting they may have something listed currently or in the past. I never trust tenants to give me good info on previous LL's after I escaped a scam someone tried to run on me.), etc. Maybe even stop past their current address and see what situation they have going on there. A drive-by at various times may be fruitful. While I would be cautious here given how things developed, I would think that if you have done all of the relevant background research on the original applicant and he met your criteria (3x the rent plus the stuff I mentioned above - you'll need standards so you can treat everybody the same) then it wouldn't matter if he added someone else as his income and credibility should sufficiently cover. What you are mostly worried about is adding a second tenant that would be a problem, thus, all the background stuff needs to happen before the move in. Do not allow them to rush you. The background is complete when it is complete and neither tenant will be given a key until it is. He changed the parameters and you have your process. If he feels like it is a problem he can go find some other apartment/house. I don't mean to sound cruel, but when people are trying to rush me b/c of poor planning on their part it is a red flag and I'm less inclined to be open-minded. In this situation, I would look very hard as he is starting off changing things and I think this could lead to trouble later. I don't like trouble. I want very few problems with my tenants. If it starts bad it is likely to end badly in my mind. Honestly, I'd want to say no to both of them, but my wife would likely have to talk me down to something more reasonable. I can be a bit over-reactive at times. 

Good luck.